> For the complete documentation index, see [llms.txt](https://docs.toggle.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.toggle.money/how-it-works.md).

# How It Works

Plain language. No extra words.

## You Deposit a Pair

You deposit **USDG + a memecoin** into a Toggle pool. Same idea as providing liquidity anywhere else. Two tokens, one position.

Toggle then splits them.

| Side         | Where It Lives        | What It Does        |
| ------------ | --------------------- | ------------------- |
| **USDG**     | Morpho ERC-4626 vault | Earns lending yield |
| **Memecoin** | Held as the token     | Waits for a swap    |

{% hint style="info" %}
An ERC-4626 vault is a standard savings box. You put USDG in. You get a receipt token back. The receipt grows as borrowers pay interest. That is yield. It is one-sided. There is no second token in the vault, so there is **no impermanent loss on that USDG while it rests**.
{% endhint %}

## Someone Wants to Swap

Aggregators treat Toggle as a liquidity source. Toggle quotes how much it can fill. If the route is good, part or all of the swap comes here.

Then, in **one transaction**:

{% stepper %}
{% step %}
**Pull USDG**

Toggle withdraws only the USDG that trade needs from Morpho.
{% endstep %}

{% step %}
**Pair with the meme**

That USDG sits next to the memecoin as Uniswap v4 concentrated liquidity.
{% endstep %}

{% step %}
**Swap**

Uniswap v4 runs a normal swap. The trader gets what they bought. The pool keeps the LP fee.
{% endstep %}

{% step %}
**Go home**

Leftover USDG goes back into Morpho. The memecoin stays as the memecoin.
{% endstep %}
{% endstepper %}

```mermaid
flowchart LR
    Rest[USDG in Morpho] --> Pull[Pull for swap]
    Meme[Memecoin held] --> Pair[Pair in DualPool]
    Pull --> Pair
    Pair --> Swap[Uniswap v4 swap]
    Swap --> Rest
    Swap --> Meme
```

The liquidity is in the pool only for the swap. Then it goes home.

## After the Swap

USDG is earning again. The meme is still held spot. You did not have to click anything.

If nobody trades for a while, that is fine. The dollars keep earning in the vault. Classic LP pays you nothing between trades. Toggle pays the vault rate the whole time.

{% columns %}
{% column width="50%" %}
**As an LP**

Deposit. Hold. Withdraw when you want (after the pool’s short deposit lock, if any). Your share is a slice of the pool: vault USDG + meme inventory + fees.
{% endcolumn %}

{% column width="50%" %}
**As a swapper**

A normal Uniswap swap. You do not need to know the USDG was in Morpho a moment earlier. Routers that quote Toggle correctly will route through it when the price is right.
{% endcolumn %}
{% endcolumns %}


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